The variable portion of the above manufacturing overhead is $ 12 per unit. The order would have on effect on the company’s total fixed manufacturing overhead cost.
The modifications requested by the Seattle Police Department consist of welded brackets to hold radios, nightsticks, and other gear. These modifications would require $ 34 in incremental variable cost. In addition, the company would have to pay a graphics design studio $2,400 to design and cut stencils that would be used for spray painting the Seattle Police Department’s logo and other identifying marks on the bikes.